A nutty dilemma: Chinese demand for pecans impacts local candy makers

If the state of Chatham were really a state, and therefore had a state nut, the pecan would own the designation.

Savannah is as renowned for its pecan pralines as its moss-draped squares. The city’s three main candy makers — Savannah’s Candy Kitchen, River Street Sweets and Savannah Sweets — see a near constant stream of customers in their local stores and sell their treats nationwide over the Internet and through mail-order catalogs.

Yet those candy makers are facing a new economic challenge from an unusual source: China.

The Chinese are buying up American pecans as fast as they are U.S. debt. Nuts are the world’s most populous nation’s favorite healthy snack food. Since 2007, when a global walnut shortage pushed walnut prices above those of pecans for the first time, the Chinese have increased their pecan consumption from 11 million pounds a year to more than 85 million pounds.

China now buys more than a quarter of the U.S. pecan crop.

Pecan prices have doubled as a result, making business less than sweet for the candy makers. Costs for all praline ingredients, from butter to sugar to corn syrup to half-and-half cream, have risen with the price of oil in recent months, “but nothing affects us like the pecan does,” said both Savannah’s Candy Kitchen owner Stan Strickland and River Street Sweets’ Jennifer Strickland.

Prices for pralines and other pecan treats are climbing.

Savannah’s Candy Kitchen and River Street Sweets went up 10 percent after Christmas to try and offset the 40 percent price increase — $2 a pound — they incurred last year. A pound of pralines now costs $17.95, about $1.50 a treat.

“My CPA tried to talk me into buying a pecan orchard 10 years ago, but I didn’t want to be a farmer,” Stan Strickland said. “I should have listened.”

Money may be growing on pecan trees nowadays, but pecan farming is traditionally a nutty way to make a living.

A newly planted pecan orchard takes between eight and 10 years to produce its first crop and requires diligent care.

“You have to irrigate it and spray and fertilize it from day one, and once it does start to produce a crop, the older it gets, the more maintenance is involved,” said J.B. Easterlin, a pecan broker based in Montezuma. “It’s an expensive endeavor with all the upfront costs. And it takes a lot of pecan-growing experience.”

Established growers are expanding to meet demand, albeit at a grub’s pace.

Not only does it take a decade for new trees to bear fruit, but the cost of a Georgia pecan orchard is also prohibitive – $5,250 an acre on average, up from $3,500 an acre in 2006.

The pecan shortage has left wholesalers and retailers shell-shocked.

One Georgia grower sold his entire crop, 1,800 acres worth, to China last year. The local candy shop owners say they had longtime suppliers of high-quality pecans break contracts last year.

The Chinese offered the grower so much for his crop it was worth risking a lawsuit.

“I value my relationships and wouldn’t do that, but if I were in the growing end, I would sell to the highest bidder too,” said Ruth Tracy with Tracy-Lucky Pecans, a processor and sheller based in Harlem who works with the local shops. “I don’t begrudge them at all. Hopefully, it allows them to buy more orchards and expand and, in time, we’ll see a higher-quality crop.”

American growers currently produce two-thirds of the world’s crop, with most of the rest coming from northern Mexico. China and Asian countries are just now starting to experiment with growing pecans, and the results have been poor, Easterlin said.

Making up the difference

High pecan prices won’t crack the local candy makers, but costs have them looking for new revenue streams.

Savannah’s Candy Kitchen’s Strickland may try and tap into the burgeoning Chinese market himself. The Chinese flavor their pecans, just like Americans do. But the Chinese favor spicy and tangy to sweet. And they like them in the shell.

“They eat them like we eat roasted peanuts,” Easterlin said. “They crack them, soak them in a soy solution or something similar and then dry roast them.”

Stan Strickland suspects the Chinese would go for sweet pecans and pecan candy, like pralines, provided the products have “some heat to them.” He’s considered altering his mail-order catalog for distribution in China.

Marketing to China is beyond the reach of River Street Sweets, at least for now, Jennifer Strickland said. Like her counterpart at Savannah’s Candy Kitchen – Stan is Jennifer’s father, although the businesses operate separately – Strickland has experimented with using less expensive nuts but has been unhappy with the results.

“I’d love to make the praline with walnuts or almonds, but the reality is the pecan is essential to making southern praline,” Jennifer Strickland said. “We’re trying to do some new products to help make up for what we’re losing with the higher costs of pecans, but pralines are 50 percent of our sales. Our whole business is based around them.”